FINAN200-22B (HAM)

Financial Management 1

15 Points

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Division of Management
School of Accounting, Finance and Economics

Staff

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Convenor(s)

Peter Huang

Peter Huang
9407
MSB.3.29
See Moodle
peter.huang@waikato.ac.nz

Lecturer(s)

Administrator(s)

: denise.martin@waikato.ac.nz

Placement/WIL Coordinator(s)

Tutor(s)

Student Representative(s)

Lab Technician(s)

Librarian(s)

: yilan.chen@waikato.ac.nz

You can contact staff by:

  • Calling +64 7 838 4466 select option 1, then enter the extension.
  • Extensions starting with 4, 5, 9 or 3 can also be direct dialled:
    • For extensions starting with 4: dial +64 7 838 extension.
    • For extensions starting with 5: dial +64 7 858 extension.
    • For extensions starting with 9: dial +64 7 837 extension.
    • For extensions starting with 3: dial +64 7 2620 + the last 3 digits of the extension e.g. 3123 = +64 7 262 0123.
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Paper Description

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This paper covers capital budgeting and working capital management for private and public sector organisations. Three key important questions are answered in this course: What long-term investments should the firm take on? The cost of long-term financing to pay for the investment? How will we manage the everyday financial activities of the firm?

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Paper Structure

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Lectures

The lectures will be delivered on campus (The lecture will be recorded via Panapto and the video will be available on Moodle after the lecture). The students are encouraged to attend the on-campus lectures and use the videos as a tool to review the contents.

Tutorials

Tutorials start in the 2nd week. All students should attend one tutorial (one hour) per week. Please refer to Moodle for detailed information).

The size of any tutorial group is limited, due to the size of the venue. Once a particular tutorial group has reached this limit, it will no longer be available as an option to other students, so please make your selection as early as possible.

Updates

Although most of what students need to know about the conduct and content of the paper are given in the paper outline, updates are communicated to students via announcements, lectures, or email from time to time as the need arises.

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Learning Outcomes

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Students who successfully complete the paper should be able to:

  • 1.
    Define the basic types of financial management decisions and the role of the financial manager. Explain the goal of financial management. Articulate the financial implications of the different forms of business organization. Explain the conflicts of interest that can arise between managers and owners.
    Linked to the following assessments:
    • Online Test 1 (1)
    • Case Study (4)
  • 2.
    Describe the difference between accounting value (or book value) and market value. Describe the difference between accounting income and cash flow. Describe the difference between average and marginal tax rates. Determine a firm’s cash flow from its financial statements.
    Linked to the following assessments:
    • Online Test 1 (1)
    • Assignment (2)
    • Case Study (4)
  • 3.
    Determine the future value of an investment made today. Determine the present value of cash to be received at a future date.
    Find the return on an investment. Calculate how long it takes for an investment to reach a desired value.
    Linked to the following assessments:
    • Online Test 1 (1)
    • Assignment (2)
    • Case Study (4)
  • 4.
    Illustrate and identify capital budgeting techniques and the analysis of evaluating projects. Apply financial problem-solving skills to evaluate long-term investment decisions.
    Linked to the following assessments:
    • Assignment (2)
    • Online Test 2 (3)
    • Case Study (4)
  • 5.
    Interpret and Identify the relationship between risk and return in the context of determining cost of capital for project valuation. Explain and compute a firm's cost of equity capital, cost of debt, and overall cost of capital. Illustrate and identify the problems of using the weighted average cost of capital as a discounted rate for project valuation and the solutions.
    Linked to the following assessments:
    • Online Test 2 (3)
    • Case Study (4)
  • 6.
    Illustrate what financial leverage is and explain the effects of financial leverage on cash flows and the cost of capital for a firm.
    Linked to the following assessments:
    • Online Test 2 (3)
    • Case Study (4)
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Assessment

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To be eligible to pass this paper, students must achieve an overall grade of at least 50% in the whole paper. There are four pieces of internal assessments. There is no final exam.

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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 100:0. There is no final exam. The final exam makes up 0% of the overall mark.

The internal assessment/exam ratio (as stated in the University Calendar) is 100:0 or 0:0, whichever is more favourable for the student. The final exam makes up either 0% or 0% of the overall mark.

Component DescriptionDue Date TimePercentage of overall markSubmission MethodCompulsory
1. Online Test 1
25 Aug 2022
11:00 AM
25
  • Online: Submit through Moodle
2. Assignment
22 Sep 2022
11:00 AM
25
  • Online: Submit through Moodle
3. Online Test 2
20 Oct 2022
11:00 AM
25
  • Online: Submit through Moodle
4. Case Study
3 Nov 2022
11:00 AM
25
  • Online: Submit through Moodle
Assessment Total:     100    
Failing to complete a compulsory assessment component of a paper will result in an IC grade
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Required and Recommended Readings

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Required Readings

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Online Support

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Lecture slides, tutorial resources and related teaching materials will be available in Moodle.

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Workload

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The course has 30 contact hours (lectures and tutorials). The rest of the 150 hours expected workload in this 15-point paper can be distributed as follows: 80 hours to prepare lectures and tutorials, 40 hours to prepare for assessments.

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Linkages to Other Papers

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There is a significant interrelationship between finance and non-finance areas. First, finance and accounting are related since accounting information is needed for finance decision. Second, finance and economics are related because economic activity and policy affect finance decisions, and vice versa. Finance and management are related because the management decisions, such as setting salary, hiring new staff and paying bonus must be coordinated with finance. Finance and information system are related because finance decisions rely on information. Last but not least, there are four ps of marketing, product, price, place and promotion. Clearly, the price and promotion, e.g., advisement are related to finance.
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Prerequisite(s)

Prerequisite papers: FINA201 or FINAN101

Corequisite(s)

Equivalent(s)

Restriction(s)

Restricted papers: FINA311, FINA510

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